United Arab Emirates-based Emirates Telecommunications Group Company (Etisalat Group) might be unwilling to release the Etisalat brand to the consortium of banks, except the banks are prepared to fulfill certain conditions.
Emerging Markets Telecommunication Services Limited (EMTS), operating as Etisalat Nigeria, is using the brand name after a contractual agreement with the UAE-based telecoms giant, TheNewsGuru findings reveal.
TheNewsGuru reports Etisalat Group released the brand name to EMTS to operate in Nigeria after securing 45% and 25% ordinary and preference shares respectively. Etisalat Group is holding the shares in Etisalat Nigeria through EMTS Holding BV established in the Netherlands.
After Etisalat Nigeria defaulted on a loan facility agreement with a consortium of Nigerian banks, the Security Trustee of the banks issued a Default and Security Enforcement Notice requesting EMTS Holding BV — established in the Netherlands, and through which Etisalat Group holds its interest in Etisalat Nigeria — to relinquish 100% of its shares.
This is after subsequent discussions between Etisalat Nigeria and the lender banks failed to produce an agreement on restructuring the loan agreement.
Etisalat Nigeria had obtained the $1.2 billion (N377.4 billion) loan in 2013 from the consortium of banks to finance a major network rehabilitation, upgrade and expansion of its operational base. The firm said last week it had paid about half (about N504 billion) of the initial loan leaving a total outstanding sum of about $574 million.
Etisalat Group is saying the 45% ordinary and 25% preference shares it is having in EMTS Holding BV that permits it to operate as Etisalat Nigeria has a quantity of no importance.
“The carrying value of these shares in Etisalat Group’s books is nil,” according to a letter signed by Etisalat Group Chief Financial Officer, Serkan Okandan, addressed to the Abu Dhabi Securities Exchange, and made available to TheNewsGuru.
“The remaining financial exposure from the Company is related to operational services (such as international roaming) provided by Etisalat Group to EMTS, and management and technical and IP related agreements,” it added.
Etisalat Group did not however overtly state in the letter that it had transferred 100% of its shares in Etisalat Nigeria to United Capital Trustees Limited, the Security Trustee of the banks, but it did confirmed the lenders extended the deadline from 9 June 2017 to 23 June 2017 5:00 pm Lagos time.
Etisalat Group said the operational services, such as the international roaming, provided to EMTS, and the management and technical and IP related agreements is limited to an amount of AED 191 million (about N16.3 billion) as of March 31 2017, stressing this is the subject of ongoing discussions with EMTS and the EMTS lenders.
“Should there be any material developments on this subject, a further announcement would be made in accordance with applicable Securities and Exchange rules and regulations,” the letter concluded.
Meanwhile, the Nigerian Communications Commission (NCC), in a statement by its Director of Public Affairs, Tony Ojobo, has said “The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sub licensed or transferred to another party unless the prior written approval of the commission has been granted;” quoting Section 38 and Sub-section 1 of the Nigerian Communications Act (NCA) 2003.
According to the NCC, Sub Section 2 of the same provision equally states that, “A licensee shall at all times comply by the terms and condition of the license and the provision of this act and its subsidiary legislation”.
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The consortium of banks include Access Bank, Zenith Bank Plc, Guaranty Trust Bank Plc, First Bank Limited, Fidelity Bank Plc, First City Monument Bank (FCMB), Stanbic IBTC, Ecobank, United Bank for Africa (UBA) Plc and Union Bank of Nigeria Plc.
Zenith Bank, Guaranty Trust Bank and Access Bank have the top three exposures of the total loan – N80 billion, N42 billion and N40 billion respectively.
Whatever becomes of EMTS’s Etisalat Nigeria, the NCC has assured and reassured the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator.
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